One of the 5 largest banks in South Africa, FNB Bank notified 3 major South African cryptocurrency exchanges that their bank accounts will be closed. The crypto-exchanges affected are Luno, ICE3X, and VALR.
In a letter, FNB informed these crypto-exchanges that it had decided to withdraw its banking services to crypto exchanges and other companies dealing or trading in cryptocurrencies after the bank re-evaluated it’s risk appetite for virtual currencies. FNB said it would start to provide its services to cryptocurrency-related businesses in future if there is clarity on the regulatory side of things.
FirstRand Bank (parent company of FNB bank) has been considering its risk appetite in respect of virtual currencies and virtual currency exchanges for some time. Within this context the bank has taken the decision to discontinue the provision of banking services to virtual currency exchanges and/or entities dealing/trading in virtual currency. Future regulatory clarity may cause us to revise our decision.
FNB’s move is also similar to what happened toGolix when banks closed their doors for Zimbabwe’s largest crypto-exchange. The only major difference is that South Africa’s central bank is not the one that instructed FNB to stop providing banking services to cryptocurrency-related businesses. That goes on to say that its only FNB that’s stopping to provide its services to crypto-exchanges but other banks in South Africa are still dealing with the crypto-exchanges. So operations at the crypto-exchanges are not expected to be disrupted since they have somewhere else to take their business. However, since one of the ‘big 5 banks’ in South Africa closed its doors for crypto exchanges, it could pave the way for other banks to follow.
Regulation continues to be a major barrier in crypto adoption globally. FNB’s ban is further proof that regulatory clarity will be needed before we can see massive crypto adoption by many countries.